Auditors have difficulty applying the concept of materiality in practice because they often do not know who the users of the financial statements are or what decisions will be made.

Question

Quizplus · Accepted Answer

Auditors may have limited knowledge about the users of financial statements and their information needs, making it challenging for them to determine what information is material and what is not. This can result in subjectivity and judgement calls when applying materiality, which may lead to errors or inconsistencies in the audit process.

Auditors Have Difficulty Applying the Concept of Materiality in Practice